ABBA to offer public stock in new subsidiary

Hollywood, 20th January 1981

Already touted as Sweden’s most profitable business organization by virtue of its far-flung holdings in such areas as real estate, art, oil and computer leasing, pop group ABBA will in March begin offering shares in another recently acquired concern to the Swedish public.

There are also plans, according to group manager Stig Anderson, who overseas the ABBA business empire, to list their Polar Group of companies on the New York and London exchanges in two years’ time. In 1979, five years after that multidivisioned operation was launched, it posted a net profit of $US15,000,000 on a $US25,000,000 gross.

Initial stock offering in Sweden is for Stockholm Badhus, a commercial and residential real estate company whose net worth, Anderson says, is around $US35,000,000.

Anderson and the group acquired an 87% stock interest in the 116-year-old firm six months ago. They plan to retain a 40% majority interest in it.

Although this is the first time that ABBA has offered shares in its holdings, Anderson says that the group’s enviable track record with investments has influenced buying decisions in Sweden for some time.

He notes, for example, that Stockholm Badhus shares were selling for $US25 per when the group bought in six months ago. In Stockholm last Wednesday, 14th January, 1981 according to Anderson, the price was $US75. Likewise, group’s Monark bicycle and sports equipment company buy-in two years ago was made at $US12 a share; today, Anderson says, the company’s stock is going for $US45 per.

Big tax bite

Diversification of the group’s music earnings, which now far exceed $US100,000,000, began almost immediately after ABBA’s first international success in 1974, when they won the Eurovision Song Contest 

“Music is where our hearts are, but somebody must take care of the results,” says Anderson, noting that the limited size of the Swedish music industry made it difficult to bankroll new musical endeavors there, “so we had to diversify (to avoid the country’s 85% tax bite).”

Anderson concedes that “we once thought of moving to Monaco or Luxemburg” to sidestep that stiff levy, “but in spite of the climate, in spite of the taxes, we decided to stay. But we had to plan for the future.”

Thus was born the Polar Group, comprised at present of four main divisions and their several subsids. Polar Music International, for example, collects ABBA’s disks royalties and merchandising sales monies. That division also, however, includes the AH Graphic subsid, which owns art galleries and leases artworks to corporations, and Pol-Oil, which imports oil and gas and resells it through the Rotterdam spot market, and Invest-Finans, which leases everything from heavy farm machinery to computers. That two-year-old subsid had a 1980 turnover of $US75,000,000.

Sweden Music, the second division, is owned by Anderson, a hold-over from his pre-ABBA days as Sweden’s largest music publisher. Company, which also administers in Scandinavia for several U.S. publishers, retains that little today. Anderson also owns the Polar Records label, another pre-ABBA endeavor of his.

Third division is Harlekin, which collects the composers’ shares of ABBA disk royalties and oversees the touring side of their careers. Group receives 100% of these earnings, but in other areas of the empire not related to their music and performing earnings, the band receives a 50% share, Anderson the other 50%.

Fourth arm in Sarimner, an investment partnership between Anderson and the band. Holdings include the bicycle company, a shopping center and a trading company.

Diversification, says Anderson, means that, should the group immediately disappears from the disk biz, the empire they’ve created will remain both active and profitable.

In fact, the group’s earnings are so big at present, both from music and their investments, that further expansion of the business side is a necessity.

Beyond the plans for U.S. exchange listings in the near future, Anderson says ABBA may move into the American real estate field in coming years. There is also a possibility, he says, that the group will launch record production arms in Gotham and L.A. in the future. Transcribed for ABBA World

Variety (New York) · Wednesday, 21 January 1981 (Pages 91 & 99)

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